Q1. I want to take out a secured loan. How will I know if my assets are suitable?
As you will be aware, secured loans work by releasing the value of something you own, providing you with the cash and then returning the item to you once the loan has been repaid. As such, your assets will need to be of a high enough value for this process to take place – examples include diamond jewellery, fine art, prestige cars and luxury watches.
Q2. How will the loan provider assess my possessions?
You will need to invite the loan provider to your property, or arrange to meet them at a specific location (usually their own premises) so that they can appraise the item you wish to secure the loan against.
Good pawnbrokers offering services in the UK will use experts from professional organisations at this point in the process for your added peace of mind. For example, some offering secured loans against diamond jewellery will employ professionals from the Gemmological Association of Great Britain, while those involved with artwork will send experts from Sotheby's. It is better to seek out this kind of professional accreditation than to use a loans provider you are not sure of.
Once the item has been appraised, the valuer will send an open market valuation report, which will usually come in the form of both a bound paper document and an electronic attachment for maximum convenience.
Q3. An open market valuation? What's that?
Receiving an open market valuation means you have been provided with the value your item would be expected to reach were it put up for auction. It takes into account sales history from houses such as Bonhams, current market and price conditions and information from private treaty so you can rest assured you receive the most accurate loan quote possible.
If you have your item insured and the paperwork is kept up-to-date, you will notice that the open market valuation differs from that on your insurance documents. Do not be concerned that this is erroneous – the insurance value is always higher, sometimes significantly.
This is because it must cover the full retail price of the item, as well as the cost of repairing or replacing it and the use of insurance personnel to assess and process the claim.
Q4. What happens after I have received my valuation?
Once you have been given your open market valuation, you will also be provided with a loan quote detailing the amount of money you can receive in a secured loan against your item and the terms and conditions with regard to repayment. All you will have to do is decide whether or not you want to accept this amount. Remember that reputable companies will never you pressure into accepting a loan.
If you decide you are happy with the quote, let your chosen loan company know you want to go ahead and they will arrange for you to either post your assets to them via secure mail or have them discreetly collected if they are too large.
Once this has been done and your items are safe in your loan company's secure storage facilities, you will receive the money secured against them within hours to use in whichever way you like.
The loan repayment process will then begin as agreed and after the money has been repaid in full, your loan company will arrange to have your possessions safely returned to you.
It is a simple process that you can use to free up the value of your assets without having to sell them.
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